Posts by Rod David
Look ahead: Economic Calendar – for Wed Dec 28, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s housing sector data might be influential if Tuesday’s report was. There is no influential report otherwise.
Redbook
8:55 AM ET
Pending Home Sales Index
10:00 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2274.50 | 2270.00 |
| …would target | 2280.00 | 2275.50 |
| Bias-down: under | 2268.00 | 2263.50 |
| …would target | 2262.00 | 2257.50 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 1:20 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 1:20 would invoke a grace period through 1:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open Review… The race is on.
Uptrend is anchored.
Gapping up to 2262.50 immediately surged. The 2266.00 bias-up target was touched, which also served as the high of a Running Correction. 
The consolidation resolved up as aggressively as it was entered, quickly testing 2269.25. The hour since then has plateaued there.
This is a renewed bias-up environment, having exceeded the bias-up target through 10:15. Its renewed bias-up target is essentially a retest of the 2273.00 high, presumably to 2275.50 or 2278.25.
Meanwhile, the uptrend faces a challenge from that sequence around the Running Correction — surging into and out of it, then plateauing. A pullback to the consolidation’s lower quadrant would be common before resuming the rally. That’s either 2264.75 or 2263.50. Any deeper would start to be bearish, but the anchored gap up minimizes that chance.
The plateau can also resolve up, ignoring a corrective dip. Yes, its eventual reversal down would be more substantial, if not also durable. But it resolving up first would essentially marginalize sellers until new highs are probed. So, if short or shorting, even if only for a temporary corrective dip, beware a break above 2270.00.
Pre-market Tour (recording & summary)
Consolidating at the 2261.25 bias-up signal’s resistance has broken higher ahead of the open, now touching 2262.50. None of which changes that the bias-up signal doesn’t actually trigger until 10:15. None of which changes that the two prior opens rejected overnight higher highs. And none of which changes that last Wednesday’s “higher prior lows” can present resistance starting at 2263.00. Just maintaining the gap up could at least create an anchor to help absorb a morning dip. Otherwise, trending back down through the open would suggest another downdraft into tomorrow’s open.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Perking up.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Friday’s open was essentially flat around 2257.00. Thursday night, like Wednesday night, had rallied briefly up to 2261.00. But intraday Friday, like intraday Thursday, had traded only lower. Friday’s low was nearly 3 points higher than Thursday’s, and also satisfied its 2254.00 to within 1 tick. Three days of holiday weekend illiquidity didn’t attract sponsorship for resolving in either direction. But a last-minute surge to 2260.25 greeted the weekend.
Overnight action’s new info…
Last night’s narrow 2-point range has suddenly, and only recently, surged 3-1/2 points to 2261.50. That’s above both Thursday and Friday’s ranges, and above the two overnight ranges preceding them. This morning’s 2261.25 bias-up signal is resisting the surge. It’s also a third consecutive overnight higher high — the prior two were rejected before the open, and now RSIs are diverging negatively on this one.
If, then…
Low-volume environments can form patterns, but none are very predictive. That would apply equally to Friday’s late surge, as it would to Thursday’s opening slide. Today’s open is in position to be greeted unchanged from Wednesday’s close, when a Symmetrical Triangle had just begun breaking lower. If Thursday and Friday were the pattern’s false break, then a relatively larger rally can reveal itself at any time. Delaying it until late-morning for a shallow dip would be possible, but another downleg this morning wouldn’t be appropriate unless today is trending down.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2264.00 would be likely to trigger the 2261.25 bias-up signal at 10:15. Exiting the open under 2259.00 would be unlikely to trigger bias-up.